- New participants in the NFT market seem to prefer collections with real-world use cases.
- The Sandbox topped many Ethereum NFTs including BAYC and MAYC in terms of sales count because of its utility.
When the NFTs buzz was rampant in 2021, not many traders thought about utility. But the bearish market of 2022 seemed to have opened the eyes of many, and might now affect the volume of some blue-chip collections.
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According to a DappRadar and Alsomine report, released on 15 February, many traders were unaware of the possible utility of NFTs.
This might not be surprising especially as collections like Bored Ape Yacht Club [BAYC] and Mutant Ape Yacht Club [MAYC] were only seen as speculative assets during 2021 to early 2022 market boom.
The narrative seems to be changing as…
Surprisingly, the report showed that the trading volume generated in 2022 was not extremely lower than the bullish market of 2021. While the volume was $ 25.1 billion in 2021, 2022 registered $24.7 billion in organic sales.
This means that the market was able to attract new participants despite the massive downturn. However, it seemed like the new entrants invested in more education than the old guards.
This was because the survey carried out by both platforms showed that 92% valued the utility of the NFTs rather than just bragging rights.
Source: DappRadar
Despite the preference, the survey confirmed that 60% of the respondents had no idea that NFTs could have real-world use cases. However, those with the information at their disposal rated earnings, ownership, and membership as some of the top use cases that would make them buy an NFT.
Raoul Pal, who is a widely-known NFT investor and CEO of Global Macro Investors shared the same sentiment. Recently the investor, while advocating for “real utility” opined,
“One thing I do know is that “utility” based ecosystems can not be just more drops and a Discord. It must actually be a membership to a community with deep real, meaningful, measurable benefits.”
With this sentiment, BAYC, MAYC, and some other popular collections might have work on their hands. In terms of utility, The Sandbox [SAND] ranks higher than others. This is because of its decentralized virtual land offer and yield for SAND staking.
Meanwhile Parallel Alpha peaks higher than SAND but still both were not a match for BAYC, CryptoPunks, and MAYC who have done billions of dollars in volume.
But in terms of sales count, The Sandbox and Parallel Alpha were the top two with 162,284 and 181.572 respectively.
Source: DappRadar
ETH NFTs are down but what’s on the Otherside
The only reason they could not beat others in terms of sales was the average value of each NFT and the blockchain under which they fall. Of course, Parallel Alpha operates on the Ethereum [ETH] blockchain. But a 60% Year-on-Year (YoY) drop in volume impacted the whole Ethereum NFT collections.
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However, the last quarter of 2022 saw a rise in the adoption of NFTs attached with benefits. During this period, Ethereum NFTs were still ahead of Polygon and the BNB chain in terms of average transactions.
But since then, several NFT collections seem to have focused on utility instead of speculation only.
Source: DappRadar
Still, Yuga Labs might need to do more to make BAYC and MAYC more attractive as this new narrative continues to spin.
Interestingly, its other collection Otherside ranks higher in terms of utility despite having a lower trading volume. At press time, the NFT market was green as most collections recorded an increase in transactions and sales.
According to CryptoSlam, both BAYC and MAYC were in the top five. Nevertheless, considering better use cases for its owners may be a somewhat good decision that aligns with the community’s expectations.
Source: CryptoSlam
